Holding money (or crypto) in PayPal is a terrible idea. They are not a bank, they do not abide by banking regulations. They can lock you out of your account and your money at any time and leave you going in circles with their offshore support.
Yes, they are somewhat of a necessary evil if you do any online peer-to-peer buying/selling, since they are the only money transfer service that provides some level of "buyer protection", but you want to do the bare minimum with PayPal to avoid unnecessary risk.
Link one bank account (not your primary) to PayPal to receive money, and transfer received money immediately. Link one credit card for purchases. Nothing else. Do not link debit cards, do not sign up for their "balance account" where money is held in PayPal (no matter how hard they push it with UI dark patterns in their app), do not sign up for their crypto account.
If you link your bank, and approve direct debit (it’s just a popup with yes/later - very risky move), they will eventually withdraw from it when there are any issues. And most likely you’ll lose more disputes when your bank is linked - but no proof of this so take it with a grain of salt.
Staring at a “you can no longer do business with PayPal” email myself. No clue what I did, no recourse, now locked out of a fuckton of global marketplaces and peer to peer transactions that uniquely only work on a platform like PayPal.
Good point. I should have clarified that I'm referring specifically to PayPal in the US, which themselves state that "PayPal is not a bank, does not take deposits and is not FDIC insured".
Why does their support being "offshore" matter at all? If they wanted to provide good, user-friendly customer support, they would, regardless of where the reps are?
Fair enough, maybe "outsourced" would be a better way to put it. Basically they want support to cost them as little as possible and do not particularly care whether it actually offers any useful help to customers.
More specifically, their support cannot actually do anything to resolve problems. They read off what their computer screen is telling them. They can't take any actions to fix things.
Offshore support is unloved and powerless. They can't and won't fix any issue. They exist to fulfill the obligation to provide support in the cheapest form possible.
This is all true, but are they actually any worse than any other crypto exchange? I just take it as a given that a crypto exchange can lock me out and steal my money at any time with no legal consequence, and so I try to keep as little money in them as possible. And at least PayPal is older and likely to have more senior engineers and fewer vibe coders, and thus be less likely to lose everything because of an elementary security error.
That's not how any of this works. You may not receive any interest on your stablecoin balance, but the issuer certainly does. Why would they offer to lend money to the US government at zero when they can get the market rate and pocket it? What's more, these are mostly short-term instruments This means any increase in inflation will be reflected in their yield.
> You may not receive any interest on your stablecoin balance, but the issuer certainly does
A bunch of zero marginal cost capital funding purchases of U.S. debt would absolutely push down rates, possibly lower than inflation, because if you’re a stablecoin issuer you’re not constrained by yield.
This is a dumb-money venture. And if there is this much money that is this dumb, Treasuries aren’t the worst place for it to go.
> those trilions and trilions of dollars of stablecoins sure are bringing down the us' cost to borrow
If you think trillions of dollars in de novo price-insensitive demand doesn’t move a market, even one as deep as the Treasury market, I’ve got a stablecoin to sell you.
> congrats if you buy a stablecoin - you've effectively financed the US gvt at 0%.
USDC on Coinbase yields interest. The USDC people make a little spread on it, but you aren't financing the US government at 0%, your financing them at market rates. There is counterparty risk just like with a bank. Unlike a bank, there are liquid markets onchain for other fungibles.
The total stablecoin marketcap is not that high relative to US debt, and open question whether they're actually buying all the treasuries they claim. Tether has never been audited.
US govt is financed at whatever rate the stable-coin issuer finances at, which is likely a mixture of T-bills, fed overnight interest rates (via bank accounts), and other assets.
Having access to USD is still a lot better than whatever local currency most of these countries have. All those without any real central bank independence (though FED independence has become more questionable in the US as well).
...fleecing the poor worldwide...stablecoins don't change much in this
Just Devil's Advocate, but isn't that a reason not to use stablecoins? I mean, I can participate in the fleecing of the poor without changing anything at all apparently.
This is the worry of globally-available USD stablecoins.
By swapping the volatility from crypto to lower USD volatility, they effectively create a funnel from riskier currencies into dollars.
Which is the same state that previously existed... except now facilitated by the crypto industry's global accessibility/UX and with less international regulation.
Blessing USD stablecoins at the US federal level was a smart move (from the US-perspective) as it creates a much bigger demand for dollars, and if the US didn't do it then China or OPEC would have eventually gotten around to it as an end-run around dollar hegemony.
Winners:
- Crypto industry (more volume to skim)
- US Treasury (more demand for debt)
Losers:
- Countries with less-stable currencies (lose further control of monetary policy)
- China / OPEC (miss opportunity to push dedollarization further)
TBD:
- Money laundering (once volume grows, KYC and traceability will follow)
The power of not needing companies like PayPal does not preclude them from offering services that ease its use.
The benefit comes from having the option to go elsewhere. A business that cannot lock you in is more likely to try to retain your custom by offering a good service.
This point is conveniently missing. There's simply more money to be made! Now get out of here with your nonsense ideas of decentralizing money. It's bad for business.
It's not that simple, there's a niuance there - tradeoffs are to to be made if we want to have a decentralized system; it will not scale to the whole planet, if running a node is accessible; and it must be so, otherwise it's not decentralized.
The reality is, we will have a mix of custodian - through third-party - and self-sovereign usage; depending on the context and user's skill
That is the point! You don't need companies like Paypal... Companies often offer services that are "not needed" because people like convenience, ease of use, etc.
You don't need Paypal to use Bitcoin, but there's nothing in the spec that prohibits it.
I think their point is that in the end, most people want convenience. That convenience requires centralization, which eliminates a lot of the supposed benefits that something like cryptocurrencies were promoted with. We've already seen it play out very poorly several times in crypto already.
This adds convenience because I can instantly send ETH from Robinhood to PayPal to Coinbase to my Ledger, without dealing with banking rails or creating a taxable event.
The Internet is decentralized but most of us use ISPs to connect to it. Most of can't access the Internet without these companies.
In practice, the word "decentralized" just speaks to whether anyone can join in the protocol if they want. But it doesn't mean the protocol is easy to implement.
Once upon a time, their corporate and developer sites were x.com even, before they moved to a more professional domain and later sold that one back to Elon.
Someone mentioned this kind of thing in the npm breeches last week. You get desensitized to non-standard “official” urls and it makes it easier for phishers.
One of the reasons I don't think crypto can succeed is because people will only use it if it's convenient, which very likely means corporate involvement, which of course ultimately defeats the whole argument of being decentralized.
I’ve happily avoided Paypal in the last .. 6 years or so. Ever since Revolut came up with disposable cards I’m much less hesitant to give my card details to someone, also PP never stopped being shady and user-hostile in the meantime.
So I’ll continue to avoid them in the next 6 years as well.
So hold on, does this mean I can pay with crypto anywhere that accepts Paypal? Because if so that's kind of a big deal, but not at all clear to me if that is the case...
Wake me when eBay accepts BTC in exchange for silver dollars or even collector coins. They're still afraid to do the very hard thing and challenge the status quo on an even playing field.
When Bitcoin first hit public consciousness the knock from economists was that it had a built-in deflationary spiral and that seems to be true. The price keeps going up and up with a few noted bumps. Rising value is great for speculators but it's a death knell for an actual spending currency. You'd be nuts to spend it if you expect it to appreciate. That's why central banks aim for low but positive inflation.
I think the difference here is that Bitcoin is predictable deflationary vs fiat being unpredictable. If you can know in advance the rate, it becomes sorta like an investment vehicle, where instead of dividends you get appreciation of the assets.
To look at it another way - why one would spend $100 from their brokerage account if they know a year later they can spend $110?
Yes, they are somewhat of a necessary evil if you do any online peer-to-peer buying/selling, since they are the only money transfer service that provides some level of "buyer protection", but you want to do the bare minimum with PayPal to avoid unnecessary risk.
Link one bank account (not your primary) to PayPal to receive money, and transfer received money immediately. Link one credit card for purchases. Nothing else. Do not link debit cards, do not sign up for their "balance account" where money is held in PayPal (no matter how hard they push it with UI dark patterns in their app), do not sign up for their crypto account.
https://www.paypal.com/us/legalhub/paypal/program-banks-tnc
More specifically, their support cannot actually do anything to resolve problems. They read off what their computer screen is telling them. They can't take any actions to fix things.
Has this been your experience with PayPal?
congrats if you buy a stablecoin - you've effectively financed the US gvt at 0%.
now the US gvt can inflate away that debt at 0 cost to them, and pass on the cost to you.
that's why a bunch of these stablecoin companies are pushing it as a way to save for people in distressed economies.
what a way to steal from the poor.
that's why the crypto act was called GENIUS act.
A bunch of zero marginal cost capital funding purchases of U.S. debt would absolutely push down rates, possibly lower than inflation, because if you’re a stablecoin issuer you’re not constrained by yield.
This is a dumb-money venture. And if there is this much money that is this dumb, Treasuries aren’t the worst place for it to go.
If you think trillions of dollars in de novo price-insensitive demand doesn’t move a market, even one as deep as the Treasury market, I’ve got a stablecoin to sell you.
USDC on Coinbase yields interest. The USDC people make a little spread on it, but you aren't financing the US government at 0%, your financing them at market rates. There is counterparty risk just like with a bank. Unlike a bank, there are liquid markets onchain for other fungibles.
These typically pay interest. (Or have retail servicing costs attached.)
Just Devil's Advocate, but isn't that a reason not to use stablecoins? I mean, I can participate in the fleecing of the poor without changing anything at all apparently.
By swapping the volatility from crypto to lower USD volatility, they effectively create a funnel from riskier currencies into dollars.
Which is the same state that previously existed... except now facilitated by the crypto industry's global accessibility/UX and with less international regulation.
Blessing USD stablecoins at the US federal level was a smart move (from the US-perspective) as it creates a much bigger demand for dollars, and if the US didn't do it then China or OPEC would have eventually gotten around to it as an end-run around dollar hegemony.
Winners:
Losers: TBD:sure, it couldn't happen without the local warlords, but still...
Doubly so when the feature being discussed is crypto related.
I agree that it is confusing.
The benefit comes from having the option to go elsewhere. A business that cannot lock you in is more likely to try to retain your custom by offering a good service.
The reality is, we will have a mix of custodian - through third-party - and self-sovereign usage; depending on the context and user's skill
You don't need Paypal to use Bitcoin, but there's nothing in the spec that prohibits it.
In practice, the word "decentralized" just speaks to whether anyone can join in the protocol if they want. But it doesn't mean the protocol is easy to implement.
I could create an account, buy a domain name with a gift card, and put your username in the WHOIS.
https://www.attejuvonen.fi/paypal-sends-phishing-emails/
So I’ll continue to avoid them in the next 6 years as well.
There are sites that still support Visa / Mastercard but removed their Paypal support. SubscribeStar, for example.
People who love crypto will hate anything that has anything to do with legacy censorship-prone fraudulent financial institutions like PayPal.
Who is this for?
To look at it another way - why one would spend $100 from their brokerage account if they know a year later they can spend $110?